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JOHANNESBURG May 3 (Reuters) - The U.S. Securities and
Exchange Commission is unlikely to finalise its new
anti-corruption requirements for resource companies before
August, delaying a process that should have been done by April.

The reasons for the delay remain unclear but the SEC has
said it hopes to have the rules completed by August, if not
sooner. Some U.S. congressmen have said the process may not be
finished before December, several months later.
The SEC last year unveiled draft rules related to the Wall
Street reform act requiring energy and mining firms -- including
non-U.S. firms with secondary U.S. listings -- to disclose
payments to foreign governments. [ID:nN16266425]

Through the rules, the SEC aims to enhance transparency for
investors and break the "resource curse" in which many emerging
countries, especially in Africa, fail to translate mineral or
oil wealth into broad prosperity. [ID:nN18273398]

Following are some questions about the routes the SEC may
take and the implications of the delay.

WHEN WILL COMPANIES NEED TO START REPORTING?

- Because the legislation was passed in July of last year
and the statute required the SEC to provide implementing rules
within 270 days, the rules should have been a done deal by
April. If that had been the case, companies would have had to
disclose payments to foreign governments as early as the
beginning of their next fiscal year.

Because of the delay, it is now possible the reporting
requirements may only kick in for FY 2013 or in some cases even
2014, as companies may pressure the SEC for extensions to adjust
their accounting software.

WHAT COULD A DELAY MEAN FOR THE RULES?

- Activists and investors who support the legislation's
goals are concerned the delay could give the industry, with its
deep pockets, more time to lobby to remove the teeth from the
rules.

Oil companies, more than miners, would like to see its
effectiveness diluted.

U.S. oil industry lobbysits have claimed that some countries
such as Angola have national non-disclosure legislation that
would conflict with the rules and could cost them projects.

But Brazil's Petrobras (PETR4.SA)(PBR.N), which will fall
under the new rules because of a secondary listing on the New
York stock exchange, has said it was not aware of any country
with a curb on official disclosure. [nLDE72M1VF]

WHAT ARE OTHER AREAS OF DEBATE AND CONTENTION

- There are several.

The SEC for example has signaled it may decide to allow the
disclosure requirements on payments to foreign governments to be
"furnished" rather than "filed."

The information would then be presented in an exhibit
attached to the annual report, and not filed in the body.

Analysts say this will have implications for investors. For
example, if such a payment was found to have been materially
misstated and resulted in a loss to investors, investors would
have no legal recourse.

If a filed disclosure were misstated, investors would have
legal recourse, removing the burden of enforcement from the SEC
itself. This would make it a more efficient regulation and may
help tilt the SEC in this direction.

DEFINITION OF A PROJECT

The legislation calls for "project-by-project" details of
payments to foreign governments, a provision welcomed by some
investors and anti-poverty campaigners but resisted by industry
groups such as the American Petroleum Institute (API), which
represents more than 450 oil and natural gas companies.

But how will a project be defined? A project for example
could be a successful bid to explore or develop an off-shore oil
block or start a mine.

Some analysts say a project could be defined all the way up
to the country or regional level, so a "mineral trend" --
mineral deposits running through several countries -- could be
construed as a "project". This would considerably dilute the
legislation's transparency aims.

WHAT IS ULTIMATELY AT STAKE?

Plenty.

For example, the oil and mining industries in particular are
seen contributing to triple woes -- graft, capital flight and
poverty -- that are the most insidious side of the "resource
curse."

In a report last year, anti-graft watchdog Global Financial
Integrity estimated that Africa alone lost $854 billion in
illicit flows from 1970 to 2008, and much of this outflow came
from resource-rich countries.

GFI calculations recently provided to Reuters showed almost
$6 billion was spirited out of oil-rich Angola in 2009 -- a vast
sum that represented almost a sixth of its national budget.
[nLDE733035]